Setting up shop: Creating a Contract

Family child care is more than just fun and games, it is a small business. Like any business, the agreements are legally binding. Owners can take several steps to ensure families understand and agree with the child care's expectations for payments.

My Payment Contract was made using Google Docs, a program that runs similarly to Microsoft Word. Below I break down each piece of the contract. Some parts may need to be excluded or added to fit your business plan. This Payment Contract is for children who regularly attend the program. I have a separate contract for hourly and drop in care.

This is a standard component to business paperwork. At the top of a document type the company name, address, phone number, and email. Other information like a fax number, web site, or owner's name can be added here as well. According to Minuteman Press, letterhead asserts your professionalism and makes you appear more confident to possible clients. I also include the type of document it is at the top of the paper, so it is easily located and clearly stated.

Important Dates
The contract is a legal document. There are several dates that should be clearly stated and agreed upon by both the provider and client. Date of enrollment, date of withdrawal, first day of attendance, and last day of attendance should be part of the contract. This information will help keep you organized if a child leaves and comes back and if you have someone assisting you with accounting.

Listing all possible fees on the contract and presenting them upfront shows that you are an honest business person and helps clients do financial planning. Fees that may be part of a child care program are: varied rates according to age, non-refundable deposit, enrollment fee, materials fee, multiple children discount, employee or civil servant discount.
I included a grid in this section, so that the contract could easily be renewed each year. A separate statement is made for the initial payment, the payment that reserves their spot. I do not take a deposit, enrollment fee, or material fee. I charge first and last week non-refundable tuition at enrollment, but something else may work better for your business.

Expected attendance is a common piece of information in an enrollment packet. I include it in my contract (1) so that I can easily access their attendance (2) to define the attendance clearly on a legal document. Child care centers are licensed for a specific number of children and they cannot at any time exceed that capacity. Should a family go outside of that agreement, I have this document to support my decision to speak with them about the issue. This is particularly important if you have half-day students that leave and drop off at certain times.

Terms and Conditions
This is the "fine print" of the contract. These items are listed in the parent handbook, but pertain specifically to payments and attendance. Parents/Guardians sign that they have received and agree with the handbook, but this stresses the importance of the business side of child care. I summarized the pieces of my policies that directly affect how and when payments are made. Key points to add here could include: enrollment payment(s), time of tuition payment, late fees, payment when sick or on vacation, when and if discounts are given, tax information, early/late drop off fees, statement regarding vouchers or universal pre-k, when and how to notify of withdrawal, statement that parent/guardian has read and understands the parent handbook.

Within this section, I included scheduled closings for the year and whether or not payment is required for those closings. Many places require payment 52 weeks per year, regardless of student attendance. I have also seen businesses that allow families to use a single unpaid vacation week during the year, at their leisure.  I choose not to charge for my personal vacations, because I have no staff to pay PTO to and I am not renting any space for my program. I do charge for snow days, a handful of PTO holidays during the year, and if they choose to keep their child home for illness or vacation. Different centers choose what is best for them.

Signatures & Dates
This is the most important part of your contract. If you don't have signatures, then you don't have a contract. Any business that provides a service in exchange for money needs a legally binding contract. This is what protects you, should any payments not be made or become irregular. Parents are signing that agree to the above terms and conditions AND that they have read and understand the parent handbook.

For Office Use
I use this grid at the bottom to ensure that I have all needed documents required by my state's licensing department.

Do you include any other information on your child care contract? What is it and why do you add it?